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What happened to jobs? The pubic wants government to do something about jobs and getting the economy moving, and in DC the only thing is this weird argument about … anything but jobs and getting the economy moving! “Fiscal cliff?” What about jobs? Fixing the economy will fix the debt, not the other way around.

Economic Storm Clouds

The economy is slowing, with signs of trouble on the horizon. Recent economic indicators are not so good. Trade deficits are huge, a bad manufacturing number this week, Europe still stagnant and slipping (because of austerity), China slowing. NY Times says, “Recent economic data “surprisingly weak,” and “recovery sputtering.” From Republicans Balk at Short-Term Stimulus in Obama Plan,

“As the debate rages in Washington, data has shown the recovery once again sputtering, with the underlying rate of growth too slow to bring down the unemployment rate by much and some of the economic momentum gained in the fall dissipating in the winter.”

It’s Demand Stupid

This slowing is not happening because people are “worried about the fiscal cliff.” It is because there are not enough jobs, and the wages of the people who do have jobs are stagnant with all the gains in the economy going to a very few at the very top of the economic ladder. Europe is slowing because they attacked deficits instead of hiring people to do jobs. We are slowing because the government stopped stimulus and started cutting.

The slowdown is because the jobs are not coming back fast enough, wages are stagnant and falling, and the government is not doing anything about it. And that means that there is not enough “demand” in the economy to cause investment and hiring.

Businesses want customers, not tax cuts — and certainly not cutbacks. In fact most of what DC is focused on — austerity — will make the situation worse, possibly even much worse, as it has done in Europe.

Small Stimulus In President’s Proposal

To his credit the President’s “fiscal cliff” proposal does contain a limited stimulus to help keep the economy moving, at least at its current slow pace. But we really need a massive investment in jobs. The President’s offer of $50 billion in stimulus for one year is insufficient, but at least it is something. The Republicans offer less than nothing, they want government efforts cut.

Jobs Fix Problems: The DC elite, major media and lobbying apparatus is focused like a laser beam on how much to cut, so the wealthy can have even more. But the public isn’t stupid, they get that there is a disconnect because they know that jobs fix problems, jobs fix deficits and lots of jobs fixes wage stagnation. Strong employment = wage growth. Strong wages = strong economic growth.

The People Spoke — The Election Was Supposed To Have Decided This

The election made it obvious, the public wants jobs, wants government services like Medicare and Social Security protected and even expanded, and more than anything wants taxes raised on the ultra-wealthy.

The election made the public’s wishes clear. But Washington continues to simply ignore what the public wants, and is focused like a laser beam on what a few billionaires want.

It was like there was an intense focus on the election, the public spoke, and then the very next day all attention shifted back away from what the public wanted and onto this austerity agenda that helps the billionaires at the expense of the rest of us.

A Government Of, By and For We, the People

I recently watched the PBS series The Dust Bowl. One thing that stood out was how the government actually cared about what was going on with the people, was trying to solve the problems, and how the people got it that the government was on their side.

Today it is a very different story, with the government isolated and largely under the control of wealthy and powerful interests. The current “fiscal cliff” absorption being only the most recent example.

The public doesn’t get what is going on in DC. They want JOBS first, they want the meager government services they do get preserved and even expanded. And they want a fix to the problem of the last few decades of wage stagnation, corporate domination, outsourcing manufacturing, deferring infrastructure maintenance, unionbusting, age discrimination, and cancelling TV shows everyone likes. (Just seeing if you are still reading.)

Economy Has Lots Of Jobs That Need Doing

Jobs solve problems. Right now the country has lots of problems, so the country needs lots of jobs, which solve problems. And by great coincidence right now the country needs lots of things done. The country needs to repair and modernize its infrastructure. The country needs to update its electrical grid. The country needs to make its buildings and homes more energy efficient. All of these are things that improve the economy in the long run. And the remarkable thing is that all of these are things that will have to get done sooner or later.

So the country could just hire people to do those jobs that need doing — like FDR did. How hard is it to understand that?

1) Hire people to modernize the infrastructure and make buildings and homes energy efficient.

2) All those people are participating in the economy again: paying taxes, buying things, not getting food stamps and unemployment.

3) The economy is much more efficient because of the work that got done on the infrastructure and energy efficiency.

4) The newly efficient economy is more than able to pay off the cost of all the work that was done — that had to be done eventually.

Republicans Obstructing Everything

The current Republican view is that government itself hurts the economy, is “in the way,” and that taxes and government spending “take money out of the economy.” So they continue to block all efforts to revive the economy through jobs programs, investment in infrastructure, even helping the unemployed.

They say that providing unemployment benefits keeps people from being forced to take the lowest-paying, nastiest, most demeaning job that comes along. But progressives believe in democracy and say that’s the point of helping each other — that we are a country where we are in this together to build mutual prosperity — unemployment benefits prevent a death spiral of continually falling demand.

Republicans talk about “pro-growth” policies, always meaning tax cuts for the rich. They say that only rich people “create jobs” so giving more and more money to these “job creators” will eventually trickle down to the rest of us. But all actual evidence shows that this policy does nothing to promote growth, only inequality. In fact the times of highest taxes on the wealthy have been the times of more jobs and more economic growth shared by more of us.

Both Wall Street and Washington have lost sight of the major cause of the deep recession and exceedingly slow economic recovery. To hear all the talk, the major concern is about the impending fiscal cliff and the federal budget deficit. Fix the fiscal cliff and make major reductions in the deficit, they say, and all will be ok. We think they’ve got it wrong.

This is the 3rd anniversary of the American Recovery and Reinvestment Act, commonly known as President Obama’s “stimulus.” Republicans say it made the economy worse. Let’s see…House Speaker John Boehner said Thursday, “Today, there’s no denying the fact that his ‘stimulus’ policies not only failed, they made things worse.” Presidential Candidate Mitt Romney released an ad that says, “What did we get with all the spending?” text in the ad reads. “24 million Americans struggling for work. Record long term unemployment. 4th straight trillion dollar deficit.”So What Happened?
In the following charts, the left side, where it is red, shows how things were going before the stimulus, and the right side, where it is blue, shows the effect of President Obama’s policies. Click any chart for a larger view.Jobs: (the left side, with all the lines going down, down, down, is before the stimulus. The right side, with the dramatic reversal, with all the lines going up, up, up, is the stimulus taking effect.)

Private sector jobs: (the left side, with all the lines going down, down, down, is before the stimulus. The right side, with the dramatic reversal, with all the lines going up, up, up, is the stimulus taking effect.)

Economic growth: (the left side, with all the lines going down, down, down, is before the stimulus. The right side, with the dramatic reversal, with all the lines going up, up, up, is the stimulus taking effect.)

Republicans also say the stimulus caused the debt. So where did the growth in public debt really come from? (Remember, when Obama took office, Bush’s last budget had a $1.4 trillion deficit, which Republicans say was Obama’s fault.)

PS: see also Three Charts To Email To Your Right-Wing Brother-In-LawUpdate: Michael Linden, Director of Tax and Budget Policy at the Center for American Progress looks a the stimulus “in a new video by looking at three broad but important indicators for the American economy. All three were in bad shape before the stimulus began, and all three turned around at almost exactly the moment the stimulus started. Coincidence?”

Like this:

Problem: Your right-wing brother-in-law is plugged into the FOX-Limbaugh lie machine, and keeps sending you emails about “Obama spending” and “Obama deficits” and how the “Stimulus” just made things worse. Solution: Here are three “reality-based” charts to send to him. These charts show what actually happened.

Spending

Government spending increased dramatically under Bush. It has not increased much under Obama. Note that this chart does not reflect any spending cuts resulting from deficit-cutting deals.

In this chart, the RED lines on the left side — the ones that keep doing DOWN — show what happened to jobs under the policies of Bush and the Republicans. We were losing lots and lots of jobs every month, and it was getting worse and worse. The BLUE lines — the ones that just go UP — show what happened to jobs when the stimulus was in effect. We stopped losing jobs and started gaining jobs, and it was getting better and better. The leveling off on the right side of the chart shows what happened as the stimulus started to wind down: job creation leveled off at too low a level.

It looks a lot like the stimulus reversed what was going on before the stimulus.

These things really matter. We all want to fix the terrible problems the country has. But it is so important to know just what the problems are before you decide how to fix them. Otherwise the things you do to try to solve those problems might just make them worse. If you get tricked into thinking that Obama has made things worse and that we should go back to what we were doing before Obama — tax cuts for the rich, giving giant corporations and Wall Street everything they want — when those are the things that caused the problems in the first place, then we will be in real trouble.

Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact. … But others, including Gene Sperling, Mr. Obama’s chief economic adviser, say public anger over the debt ceiling debate has weakened Republicans and created an opening for bigger ideas like tax incentives for businesses that hire more workers, according to Congressional Democrats who share that view.

So according to the Times the choices being debated are a) do nothing, because the mean Republicans will block it anyway, or b) offer even more tax cuts for businesses. Yikes!
Meanwhile, out in the Real World…

The ailing economy, barely growing at the same pace as the population, has swept all other political issues to the sidelines. Twenty-five million Americans could not find full-time jobs last month. Millions of families cannot afford to live in their homes. … [. . .] A wide range of economists say the administration should call for a new round of stimulus spending, as prescribed by mainstream economic theory, to create jobs and promote growth.

But, back in the White House?
Mr. Plouffe and Mr. Daley share the view that a focus on deficit reduction is an economic and political imperative, according to people who have spoken with them. Voters believe that paying down the debt will help the economy, and the White House agrees, although it wants to avoid cutting too much spending while the economy remains weak.
They think that taking money out of the economy will put more money into the economy. Great. As I wrote the other day, this is austeridiocy. As England, France and every other country that ever tried to grow an economy by cutting the economy has learned, taking money out of the economy takes money out of the economy.What Works In The Real World
Here is everything you need to know about how to fix the deficits and jobs problems:

This is a chart of the monthly job losses that were occurring before and after the “stimulus” package.Before The Stimulus
In this chart, the RED lines on the left side — the ones that keep doing DOWN — show what happened to jobs under the policies of Bush and the Republicans. We were losing lots and lots of jobs every month, and it was getting worse and worse.During The Stimulus
The BLUE lines — the ones that just go UP — show what happened to jobs when the stimulus was in effect. We stopped losing jobs and started gaining jobs, and it was getting better and better.The Stimulus Winds Down
The TAIL — the leveling off on the right side of the chart — show what happened as the stimulus started to wind down. Job creation leveled off.
It looks a lot like the stimulus reversed what was going on before the stimulus.Conclusion: THE STIMULUS WORKED BUT WAS NOT ENOUGH!Jobs Fix Deficits
When people are working they are paying taxes and are not collecting unemployment. And they are buying things, which means there is demand in the economy again, so businesses will hire people.Customers Create JobsActually, the rich don’t create jobs, we do. Lots of regular people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people, regular people with money in their pockets is what keeps everything going. And the equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning.
When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going. Cutting taxes at the top steals from democracy’s ability to continue this reinvestment.
It doesn’t matter how much more money you give to business owners, businesses are not going to hire any more employees until they have a REASON to — and that reason is customers coming in the door.Businesses Do Not Create JobsBusinesses do not create jobs. In fact, the way our economy is structured the incentive is for businesses to get rid of as many jobs as they can. It costs money to pay employees, so businesses want to trim down to the minimum number required to get the needed work done.
Many people wrongly think that businesses create jobs. They see that a job is usually at a business, so they think that therefore the business “created” the job. This thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, because the businesses will have more money. But an efficiently-run business will already have the right number of employees. When a business sees that more people are coming in the door (demand) than there are employees to serve them, they hire people to serve the customers. When a business sees that not enough people are coming in the door and employees are sitting around reading the newspaper, they lay people off. Businesses want customers, not tax cuts.
A job is created when demand for goods or services is greater than the existing ability to provide them. When there is a demand, people will see the need and fill it. Either someone will start filling the demand alone, or form a new business to fill it or an existing provider of the good or service will add employees as needed.
Once again:

Businesses do not create jobs. In fact, the way our economy is structured the incentive is for businesses to get rid of as many jobs as they can.

Demand Creates Jobs

A job is created when demand for goods or services is greater than the existing ability to provide them. When there is a demand, people will see the need and fill it. Either someone will start filling the demand alone, or form a new business to fill it or an existing provider of the good or service will add employees as needed. (Actually a job can be created by a business, a government, a non-profit organization or just a person doing the job, depending on the nature of the good or service that is required.)

So a demand creates a job. A person who sees that houses on a block need their lawns mowed might go door to door and say they will mow the lawn for $10. When houses start saying “Yes, I need my lawn mowed” a job has been created!

Demand also creates businesses. The person who is filling demand by mowing lawns for people might after a while have a regular circuit of houses that want their lawns mowed every week, and will buy a truck and a new mower and hire someone to help. A business is born!

Businesses Want To Kill Jobs, Not Create Them

Many people wrongly think that businesses create jobs. They see that a job is usually at a business, so they think that therefore the business “created” the job. This thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, because the businesses will have more money. But an efficiently-run business will already have the right number of employees. When a business sees that more people are coming in the door (demand) than there are employees to serve them, they hire people to serve the customers. When a business sees that not enough people are coming in the door and employees are sitting around reading the newspaper, they lay people off. Businesses want customers, not tax cuts.

Businesses have more incentives to eliminate jobs than to create them. Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost. They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing or finding other ways to reduce the payroll. This is called “cutting costs” which leads to higher profits. The same incentive also pushes the business to pay as little as possible when they do hire. (It also pushes businesses to cut worker safety protections, cut product quality, cut customer service, “externalize” costs by polluting, etc.)

This obviously works against the interests of the larger society, which wants lots of good jobs with good pay. And businesses, while working to cut jobs and pay less, need other businesses to hire lots of people and pay well, because that is what creates the demand that makes all the businesses work.

Government To The Rescue

This is where government comes in. Government is We, the People, working for that larger societal interest. In our current system — when it works — we use government to come up with ways to balance the effects of the profit motive — which pushes for fewer jobs at lower pay — with our larger need for more jobs at higher pay for us, and for the good of all the businesses. We, through our government, create and regulate the “playing field” on which businesses operate. We set minimum wages, limits on working hours, worker safety rules and other rules designed to keep that balance between profit incentive and demand, and that playing field level. (We also provide the infrastructure of roads, schools, courts, etc. that is what makes our businesses competetive with businesses in other countries. The individual interest in paying less taxes for this has to be balanced with the larger interest that we all pay more for this, but that is another post, titled, ”Tax Cuts Are Theft.”)

Corrupted

Obviously businesses in our system must be kept from having any ability whatsoever to influence government decision-making in any way, or the system breaks down. When businesses are able to influence government, they will influence government in ways that provide themselves – and only themselves – with more profits, meaning lower costs, meaning fewer jobs at worse pay and not protecting workers, the environment or other businesses. And, they will fight to keep their ability to influence government, using the resulting wealth gains to increase their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government …

Like this:

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
As an election strategy conservatives blocked or watered down everything they could that might help the economy, hoping voters would blame the President’s party for job losses. Tomorrow we will learn if this strategy succeeded. But Wednesday can we start doing things to help the economy and the country again? Please?
Candidates on both sides are running ads asking for fixes to trade with China. Chinese manufacturers are starting to fight, claiming that (now jobless) Americans will have to pay more for goods if they have to adjust their currency toward market rates. But Chinese manufacturers are doing just fine, according to recent surveys, because their government is doing everything it can to stimulate their economy, their manufacturing and their jobs.
Where’s our government?Today’s Progressive Breakfast hilites two stories:

China’s stimulus brought them through the economic crisis, even as they lost some exports because of the slowdown. They made the leap into alternative energy technology, spent $100 billion just for high-speed rail, and showed the world how fiscal stimulus works. Their growth rate is currently 13%. Ours is currently … nowhere near 13%.
. . . So their stimulus totaled about 14% of their GDP. Our own stimulus was $862 billion in a $14 trillion economy, or about 6%. The differences between the priorities of the two plans are clear when seen on charts.
From a year ago: China’s Stimulus Package: A Breakdown of Spending: (please click through for more)
. . . China focused on investment in public infrastructure, which leads to future economic growth. We are mired in conservative ideology so we focused on tax cuts, which do little more than increase our debt.
. . . Quick lessons:
– China spent serious money, quickly. It worked.
– China focused on infrastructure. It worked.
– China has a national economic/man manufacturing strategy and invests in R&D and developing strategically important industries. We don’t.
– Don’t cut taxes, it only causes massive yearly deficits and accumulated debt.

Should you vote? Does your vote matter? If you care about jobs, your vote really, really matters this time. If the Tea Party wave does manage to take over the House and/or Senate the plans they have announced will mean a jobs crisis far beyond anything we are seeing now.
Republicans say that cutting government spending to reduce deficits (and cutting taxes on the rich to bring them back) will create jobs by lowering interest rates. While they refuse to say what they will cut, they pledge to cut a lot. What will be the effect of cuts on jobs? Lowering interest rates is not going to happen because interest rates are already zero, but the cuts will clearly cost jobs. We know this for sure because in the last two years state budget cuts caused layoffs that simply overwhelmed job creation elsewhere — so many people were laid off by states that jobs created by the stimulus and private sector just didn’t register. So we can expect more of this.
Will their tax cuts for the rich create jobs? Bush cut taxes for the rich, and his two terms created a net of … wait for it … zero jobs. So don’t hold your breath waiting for jobs to come out of that plan. Businesses need customers, not tax cuts.
So what about ideas to get customers to businesses? Don’t get your hopes up there, either. Republicans want to get rid of any remaining stimulus designed to take up the slack in demand in our economy.
How about jobs from maintaining and modernizing our infrastructure — and the long-term job creation that comes from making our economy more competitive? Republicans call maintaining and modernizing the infrastructure “government spending” and since government spending is bad, ain’t gonna happen.
What about doing something about companies that send jobs out of the country? Well just a few weeks ago Democrats voted to repeal the tax break that encourages job outsourcing. Every single Republican voted to keep it. So don’t get your hopes up there, either.
So what about working with the other side to come up with new ways to create jobs? Republicans blocked everything for the last two years — something like 420 bills were filibustered, plus many nominees to agencies and the courts. So expect more stalemate – which means no action on jobs, unemployment or anything else.If You Care About Jobs
If you care about jobs you had best get out and vote. The change that is coming if you don’t vote is not the change you want.Sign up here for the CAF daily summary.

In the 1992 campaign the Clinton War Room had a famous sign that read, “It’s the economy, stupid!” This meant that the central theme of the campaign was the economy. President Obama’s downturn-fighting war room needs a sign, too. The sign should read, “It’s the demand, stupid.” And what that means is: businesses want customers, not tax cuts.

The stimulus was supposed to help make up for the lack of demand in the economy caused by Bush’s financial crisis. The stimulus worked, but was not enough. And tomorrow’s job numbers are likely to reflect that.

Here are some (slightly out of date, new numbers come out tomorrow) job charts that show the effect of the stimulus as it kicked in, and now as it fades. First, the overall jobs picture:
The manufacturing jobs picture:
The lesson from these charts is obvious, and right in front of your face: The stimulus worked, but was not enough.
People need jobs, not tax cuts. Jobs create demand and demand creates jobs. Tax cuts just create the massive deficits and concentration of wealth at the top that kills demand and jobs as we are seeing now. When neither jobs nor demand is happening the government needs to step in and create jobs to get things moving, as well as just to keep people employed so they can get by. At a time when our economic competitiveness is hampered by an aging infrastructure that has to be fixed up sooner or later anyway, combined with the ability of the government to borrow money at record-low interests rates, it seems obvious that government should be directly employing people to modernize our infrastructure.
Here is a chart of the “output gap.” That big dipper at the top right is the current Bush-caused gap.
Government needs to step in and fill that gap by creating demand. We need fiscal stimulus. The stimulus worked, but was not enough.

Businesses Want Customers Not Tax Cuts

Businesses want customers. Hand a businessperson a check and that businessperson will smile and say, “Thank you!” But the businessperson will not hire a single person more than is needed to meet demand. That check is going in the bank. If it is a tax cut, it is going in the bank. If it is a direct payment it is going in the bank. “Thank you,” bank. There is no other path that money will take except, “Thank you,” bank.But a businessperson with customers coming through the door will do whatever it takes to make sure there are enough employees to serve those customers. Businesspeople understand opportunity. A businessperson with an overdrawn bank account will hire employees to meet demand, and will find a way to get the money to pay for it. He or she might sell a car, run up the credit cards or even pawn jewelry or sell the first-born, but the employee will be hired because customers are coming in the door. (I know this, I’ve been there.)

Economist Joseph Stiglitz spoke up on Tuesday about the Federal Reserve’s loose monetary policies, which are intended to help banks, and get businesses to borrow and expand,

“The irony is that the Fed is creating all this liquidity with the hope that it will revive the American economy,” Stiglitz said. “It’s doing nothing for the American economy, but it’s causing chaos over the rest of the world. It’s a very strange policy that they are pursuing.” [. . .] But additional monetary stimulus will “clearly” not solve the problems caused by lack of global aggregate demand, Stiglitz said.

“Lowering the interest rates may help a little bit, but that’s much too weak to address the problems facing the United States and Europe,” Stiglitz said. “We need fiscal stimulus.”

What he is saying there is that making it easy to borrow is not creating jobs or demand. We need “fiscal stimulus” which is government directly stimulating demand, which is what makes businesses hire.

So, once again, the answer is so clear and obvious that it is exactly the kind of thing that the elites in DC will miss: The stimulus worked, but was not enough.

Like this:

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Before I start this post, let’s look at the actual situation. The economy is terrible, people are really hurting, they have been holding out and are starting to drop off the map. There are signs that with the stimulus fading things are starting to turn back down. But compared to what?
The overall jobs picture:
The manufacturing jobs picture:
Finally, the huge deficits. The context of this next chart is that Bush’s last budget year left us with a $1.4 trillion deficit! The projected budgets from this President will cut this in half in the next few years.
You can see for yourself from the pictures. (chart source) Under conservative policies everything was spiraling downwards. The stimulus clearly worked and stopped the death sprial, but was not enough. According to the Congressional Budget Office,

The massive U.S. stimulus package put millions of people to work and boosted national output by hundreds of billions of dollars in the second quarter, the nonpartisan Congressional Budget Office said on Tuesday. . . . CBO said President Barack Obama’s stimulus boosted real GDP in the quarter by between 1.7 percent and 4.5 percent, adding at least $200 billion in economic activity.
It raised employment by between 1.4 million and 3.3 million jobs during the second quarter of this year, CBO estimated.

Eighteen months later, the consensus among economists is that the stimulus worked in staving off a rerun of the 1930s. [. . .] It’s no surprise that the administration would proclaim its own policies a success. But its verdict is backed by economists at Goldman Sachs, IHS Global Insight, JPMorgan Chase and Macroeconomic Advisers, who say the stimulus boosted gross domestic product by 2.1% to 2.7%.

The stimulus worked but was not enough.What Now?In the context of this picture of the economy, President Obama’s economic advisor Christine Romer is stepping down. In her departing speech she said that the economy needs more stimulus to get us to the point where private business is again driving the economy. Romer Calls for More Stimulus,

U.S. Council of Economic Advisers Chairman Christina Romer, in her final speech before stepping down, called on the country to stomach new stimulus measures to lift the lackluster economy, even in the face of growing fears about the nation’s deficit.
“Concern about the deficit cannot be an excuse for leaving unemployed workers to suffer,”

The clear conclusion from all available evidence: The stimulus worked, but it was not enough. In addition, in an effort “to attract Republican votes” that never came, 1/3 of the stimulus was wasted on tax cuts that leave nothing behind but debt. Much of the package was emergency relief for the unemployed, the states, and other emergency safety net programs but won’t contribute to job-creation and reviving business. Only a fraction went to infrastructure, which is the soil in which business thrives and the country maintains its worldwide competitiveness,

The American Society of Civil Engineers puts the bill’s infrastructure spending at $71.8 billion, or less than one-tenth of the package.

The stimulus worked but was not enough. Economists are calling for more stimulus and extending unemployment benefits.What The Right Says
Meanwhile conservatives are placing their bets on benefiting from a worsening economy, and so are blocking things that might help. Conservatives correctly believe that the worse the economy is doing, the better the chances that they will pick up more House and Senate seats in the coming elections. So it is in their interests to make sure that is what happens. Capitalizing on the shock the nation felt when it heard about the size of the deficit the previous administration left behind, conservatives are trying to block attempts to add stimulus.
And with the original not-enough stimulus fading, the right is trying to drive a narrative that “government spending kills jobs.” This follows decades of “tax and spend” rhetoric that claims that “taxes take money out of the economy,” “government spending slows the economy” and similar nonsense. The original “starve the beast” plan to kill government and democracy by denying them the funds they need is on the verge of succeeding.
To drive this strategy they claim that it is the stimulus itself which has kept the economy from recovering. Newt Gingrich, in Fire the Job Killers,

The big government stimulus bill, the tax increases of the health bill, the plan to let the 2003 tax cuts expire, and the massive growth of government under the Obama Administration are all actions directly attributable to this administration which have killed jobs.

Gingrich even claims that helping the unemployed, not the recession, is the cause of the unemployment!

A few weeks ago in this newsletter, I cited a study by Robert Barro which estimated that without the extension of unemployment benefits to 99 weeks, the unemployment rate would be 6.8% instead of 9.5%.

Republican House leader John Boehner recently gave a speech on his economic plan in which he said that the economy is “stalled by ‘stimulus’ spending” and “each dollar the government collects is taken directly out of the private sector.” (An NDN study found that following the Boehner economic plan will add $4.188 trillion to the debt.)
Some other voices on the right:
Murdoch’s NY Post: Romer admits stimulus failed

Dr. Christina Romer is leaving the Obama administration, and in her final speech she admits that the stimulus did not work to revivie the economy as she had hoped and as President Obama promised.

Instead of cutting taxes (especially capital gains taxes) and reducing regulation to entice new investment, Barack Obama and Congressional Democrats chose to chase a government takeover of health care, a massive tax on energy production that would penalize expansion and growth, and expanding the jurisdiction on Wall Street of the same agencies that had watched the collapse come and did nothing about it.

Except, of course, 1/3 of the stimulus was tax cuts. (Further proving that tax cuts leave nothing behind but more debt.)
These are just a few samples from the drumbeat.
America faces a choice. The stimulus worked but was not enough. So we can proceed with “reality-based” solutions that have helped, and demand more stimulus, or we can go back to conservative policies that killed the economy.Sign up here for the CAF daily summary.

By 57 to 37 percent, voters in these 60 Democratic seats believe that President Obama’s economic policies have produced record deficits while failing to slow job losses — and not averted a crisis or laid a foundation for future growth.

The public believes the record deficits were caused by Obama’s policies because:1) Conservatives have pursued a strategic propaganda campaign to make the public believe this. They have used charts that show Bush’s 2009 budget as Obama’s, headlines that say this, repeatedly said it over the radio and conservative TV networks, etc.2) The administration and supporters haven’t responded to this campaign in any way, didn’t seem to understand there even was a campaign to blame Obama for Bush’s deficits, and now appear to believe it themselves.
Isn’t this the story of the last few decades? Conservatives wage a strategic propaganda campaign to convince the public of XXX. Democrats don’t respond, don’t even understand there is a propaganda campaign being waged, and in time begin to support the conservative narrative.
But this time it is absolutely dead serious. The correct understanding of the cause of this deficit is absolutely crucial because doing the wrong thing now will throw the economy into depression.
The economy is on a precipice. Unemployment remains close to 10% with no help in sight and help for the unemployed running out. Economists are trying to tell Washington that more stimulus is needed, that it is crucial to directly create jobs, that the unemployed must receive checks and health care, and that cutting back now is exactly the wrong thing to do. Paul Krugman and others are becoming more and more alarmed about this. But with the public believing that the government is about to go broke, the political will can not form for doing the right thing.But there are perceptions and then there are facts. It is just a fact that the huge $1.4 trillion deficit was Bush’s 2009 budget, and that “Obama spending” contributed very little to that deficit. It is just a fact that the cause of current economic trouble is that the “stimulus bill” was inadequate, and its focus on tax cuts was a wasted effort. It is just a fact that letting unemployment benefits expire and refusing to pass job-creation programs will force the economy to turn back down. This is a mistake in policy caused by an intentional engineering of false perceptions.Sign up here for the CAF daily summary.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
The stimulus is running out, millions lose health insurance in 12 days as COBRA subsidies start to run out, unemployment benefits also start running out, all while the unemployment rate is rising. Foreclosures are up. At the same time out-of-money states are laying off hundreds of thousands of employees, beginning with teachers. (But hey, who needs teachers?) They are deferring infrastructure maintenance like roadwork and water/sewer systems and other public investments that employ people while creating the conditions that enable to economy to grow.
In fact, the stimulus is not only running out, but these state layoffs and other factors mean that government is now a net drag on the economy. The hope was that the stimulus would be enough to hold off the effects of the downturn and provide enough of a boost to get the “economic engine” running again. But for various reasons much of the stimulus was cut back or wasted on ineffective tax cuts, so as it runs out there are signs that the economy could sink back down.This chart shows government contribution to GDP growth, now negative due to state and local governments laying off employees and reducing infrastructure investment.
With all of this going on the DC “conventional wisdom” is that the economy has turned the corner, and no more help is needed. Wall Street and big corporations are making money again so it is time to move on and let regular people fend for themselves. The public wants jobs and a government that works for them, the DC insiders want government to stop spending on We, the People and focus on big corporations.Compare this DC “conventional wisdom” with the current jobs situation. While the economy has finally stopped losing jobs, it is not yet creating enough jobs even to keep up with new workers entering the labor force. Never mind putting unemployed people back to work. Following is a chart of job losses during recessions. This chart shows just how bad this recession is compared to previous recessions, and how we are nowhere near normal.
This “Wall Street and corporations are OK so our jobs here is done” sentiment combines with the right-wing drumbeat that anything government (We, the People) does is bad, (which translates to all decisions should be made by the biggest corporations) and the related drumbeat that any government spending on We, the People is a very bad thing after President Bush left us with a $1.4 trillion deficit.Congress, what’s the holdup?
There are efforts in the Congress to try to do something to help the situation for regular people. For example, the War Supplemental (this is in a war bill because bills for bailing out Wall Street, and for anything to do with military MUST PASS and do so within 72 hours) contains $23 billion to help keep states from laying off 300,000 teachers. It is meeting opposition as “another bailout.” That’s right, the very people who bailed out Wall Street are now blocking a bill helping teachers, calling it a “bailout!”
Then there is the Local Jobs for America Act. This act puts $75 billion into direct government hiring at the state and local level, creating or saving an estimated one million jobs. According to EPI, the $39 billion comes straight back from taxes and reduced unemployment payments!
Unemployment is about 10%. Millions are unemployed and are about to lose COBRA subsidies and unemployment benefits. States are laying off hundreds of thousands. Investment in maintaining and modernizing infrastructure is nil. DC elites think everything is fine. The disconnect between people inside and outside the DC bubble is growing almost as fast as the concentration of wealth at the top.
President Obama has talked about a bold, large scale vision for a new direction for the country. But Congress and the President are getting trapped in austerity budget thinking that won’t allow them to go in direction of stimulus and helping regular people. If there is to be no money because of an austerity budget then American competitiveness, the economy and the mood of the public can only get worse. Do the DC elites actually believe the public is going to reward this with votes?Sign up here for the CAF daily summary.

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.Friday’s jobs report said 263,000 jobs were lost in September.
BUT that is after 571,000 people gave up actively looking for work. The number of jobs lost last month was 263,000 plus 571,000 = 834,000.
The “stimulus plan” is currently creating (and/or saving) between 200,000 and 250,000 jobs a month. Yes, that means the real job loss would have been at least 1,034,000 without the assistance of the stimulus plan.
On top of that the “birth/death” model — the government’s assumption that a number of small businesses are starting up that they are not tracking — is overestimating job creation, leaving policymakers without needed warning signals. The job loss numbers for the last year are expected to be revised upward by 824,000 early next year as a result.
This is bad. Really bad. We need a real jobs program, and we need it bad.
There is something else we need: we need progressive leadership that understands how important this is to people.
Here is what I mean. I came across a news story from the fight over the stimulus plan earlier this year, that now in light of Friday’s terrible jobs report says a lot more than it said at the time. House Dems Strip Stimulus of $200 Million Provision to Refurbish National Mall,

“The move was made amidst a torrent of GOP criticism about wasteful or non-stimulative spending in the bill, including those two projects, as the president attempts to woo House GOPers.”

Yes, the House gave up this project that would have brought jobs to DC – and fixed up the the National Mall – to try to get Republican votes. How did that work out? How many House GOP votes did they get?
How many people in DC could be employed fixing up the mall and other buildings? The Democrats took out $200 million that was originally in the stimulus without gaining a single vote for the bill for doing it!
Meanwhile, the terrible jobs report showed that state and local governments are shedding jobs,

“Government employment fell by 53,000, with the largest drop—24,000 jobs—in the noneducation component of local governments.”

… “state stabilization funds” … were cut back by $40 billion this weekend in the deal cut by Senate centrists.

That’s right. The original stimulus plan provided funds to help keep states from laying people off. These funds were cut — and now states are laying off.
The compromises in the stimulus plan have consequences, and those consequences are people’s jobs. The compromises were an experiment in “bipartisanship” that failed. The stimulus package gave up several important things, but how many Republican votes were won over? And as a result real people are losing real jobs.
Making matters worse, unemployment compensation is starting to run out for many people who were laid off when this mess started. AND the COBRA health insurance subsidies are running out soon as well! On top of that, contractors – employees who are not called employees because companies can get away with not paying benefits, stock options, unemployment insurance, etc. – a huge component of the labor force, don’t even get unemployment or COBRA in the first place.We Need Jobs Programs NOW
So here is an idea from outside of Washington: How about our government help our people by putting together some real jobs programs? Put people to work while we figure out how to fix the economic mess that conservative policies created.
It is time to use the power of government to start doing something that helps people, and that is not blocked by a misplaced need to get “centrists” (read: politicians trolling for payments/future jobs from big corporations) to like you or a fear that Rush Limbaugh is going to say something bad about you if you go ahead and do what we elected you to do. Here is a news flash: The market-fundamentalist corporatists are not going to like you, and Rush Limbaugh IS going to say bad things about you. Get a clue, they are not responding to the carrots so start using sticks.
Friday’s jobs report says this mess is not going away any time soon. Friday’s jobs report shows that things are too serious and too many Americans are suffering for the administration and congressional leadership to continue playing nice guy and give-in strategies. This is important to too many people. People need to be able to eat and have shelter – never mind the health care fiasco – and they need this now.
And it would be politically popular. Think about this: giving people jobs would be politically popular.Here are some job ideas:
Why don’t we pay people to start retrofitting homes and buildings today to be energy efficient, for free?
Why don’t we pay people to do thousands of projects in the national and state parks?
Why don’t we add a teaching assistant to every classroom> And why don’t we hire enough teachers to cut class sizes in half?
Why don’t we fix all the roads and bridges that haven’t been repaired for decades?
What about direct aid to manufacturers who still cannot get credit?
Here’s a big one: why don’t we cut the workweek to 30 hours? How many people will that put to work? Do you think people are going to object to having to work 30 hours instead of 40?
Oh, and why don’t we fix up the National Mall in Washington DC? It needs it and people in DC need jobs. There is simply no excuse not to do this.